WATSONVILLE -- As the financial picture improves for schools, Pajaro Valley leaders are under increasing pressure to put more money into classrooms.

Teachers and students urged the board to loosen the purse strings to reduce class sizes and restore positions cut in recent years.

The push comes as two new board trustees -- Maria Orozco and Lupe Rivas -- joined the board after winning election. Judge Heather Morse swore in the pair, as well as Trustee Karen Osmundson, returning for a third term, after a financial presentation by Chief Business Officer Brett McFadden.

The board also honored Doug Keegan, leaving the board after two four-year terms that included three years as president, and Sandra Nichols, who stepped down in August after nearly 12 years to launch a successful bid for the county education board.

Though McFadden delivered a positive report on the district finances and told the board he and other district administrators would be exploring spending options in advance of upcoming labor negotiations, he continued to advise caution.

"You went through the worse recession ever and you fared pretty well," McFadden said. "It took six or seven years to get into this trough, and it will take several years to get out."

McFadden said he'd update the board in January after Gov. Jerry Brown releases the 2013-14 state budget.

But Jack Carroll, executive director and chief negotiator for the Pajaro Valley Federation of Teachers, said with the passage of Proposition 30, the state tax measure on the November ballot, there was reason to believe revenues would be increased in the future. In addition, the district set aside more than $7 million in case the proposition failed. That money could be used to improve conditions now.

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"Ideally, we would have another board meeting this month so we could have assistance for our students in place by next semester," he said.

Physical education teachers and students asked for relief from crowded classrooms.

Watsonville High School teacher Nicole Lewen delivered a letter signed by all the physical education teachers from her school and several middle schools. She said the contract maximums of 50 students per teacher should be reduced to 35. Students aren't getting the attention they need or the time to work out on equipment, she said. With Watsonville's childhood obesity rates higher than state average, it's a problem that needs to be fixed.

"We'd like to see our contract changed to 35 so we can fight the childhood obesity rates and make our kids stronger," Lewen said.